Are we going to witness an historical housing price correction amid sharpest rise in unemployment and social tension?...and the minimum you should know in order to protect yourself from this downturn from an economic, stock market and political point of view... with a pinch of humor and sarcasm.

Thursday, 10 January 2008

Swedish Housing Price : 2008 "Judgment Time"?

"Swedish house prices have increased by an impressive 130% in real terms over the last 10 years".

"Our colleagues David Miles and Vladimir Pillonca estimate that slightly more than 50 percentage points of this increase can be attributed to expectations of further increases in house prices, while only around 30 percentage points can be put down to the reduction in real interest rates."

"At the same time, household indebtedness as a proportion of disposable income has reached 140% (see the Riksbank’s latest Financial Stability Report)."

"In 2H07 house prices ground to a halt; if the housing market goes into reverse, household balance sheets will be affected substantially."